New car registrations fell 5.8% in August, including a 5.5% decline in the fleet sector, despite a boost to demand for fully electric and plug-in hybrid vehicles.

Battery electric car registrations increased by 77.6% in August; PHEVs were up 221.1%

The fall comes after new car registrations rallied in July and indicates July’s rise was the result of pent-up demand during lockdown.

In contrast, August – traditionally one of the quietest months in the automotive calendar – saw a total of 87,226 units registered, down 5,347 units on the same month in 2019. Fleet demand was down by 5.5% while ‘Business’ registrations to firms with fewer than 25 vehicles fell by 57.9 and private demand fell 1.2%.

The impact of the pandemic is illustrated best by the year-to-date figures; overall registrations are down 39.7%, with ‘Business’ registrations down 51.5%, fleet down 42.7% and private registrations down 35.7%.

Positive news came in the form of ultra-low emission vehicles; registrations in August rose by 110% as new models hit the market. Sales of plug-in hybrids increased by 221.1%, although they still only accounted for one in 30 sales, while battery electric car registrations increased by 77.6% in the month. They now account for 6.4% of the sector, or 4.9% of registrations year to date; up from 1.1% in the same period last year. The industry however has pointed out this is a far cry from the government target for EVs to comprise 70% of new car sales by 2030.

The new figures accompany new calls from the UK automotive industry for binding targets on charging infrastructure development and long-term commitments to incentivise the purchase of zero emission capable vehicles to accelerate demand. The SMMT is calling for the continuation of the Plug-in Grant and its re-introduction for plug-in hybrids, while it also says at least 1.7 million new on-street charging points will need to be built by 2030.

Commenting on the sombre August registrations, Mike Hawes, SMMT chief executive, said: “The decline is disappointing, following some brief optimism in July. However, given August is typically one the new car market’s quietest months, it’s important not to draw too many conclusions from these figures alone. With the all-important plate change month just around the corner, September is likely to provide a better barometer. As the nation takes steps to return to normality, protecting consumer confidence will be critical to driving a recovery.”

And Philip Nothard, Cox Automotive UK’s customer insight & strategy director, pointed out that August’s overall new car registrations total of 87,226 was actually a positive result compared to the 2000-2017 average of 73,875 and highlighted that both August 2019 [92,573] and August 2018 [94,094] new car registrations were inflated due to the influence of WLTP and RDE in the September months. He also said that order banks are favourable for the September plate according to many of the large dealer groups.

And Philip Nothard, Cox Automotive UK’s customer insight & strategy director, pointed out that August’s overall new car registrations total of 87,226 was actually a positive result compared to the 2000-2017 average of 73,875 and highlighted that both August 2019 [92,573] and August 2018 [94,094] new car registrations were inflated due to the influence of WLTP and RDE in the September months. He also said that order banks are favourable for the September plate according to many of the large dealer groups.

Jon Lawes, managing director at Hitachi Capital Vehicle Solutions, also said the August decrease in car registrations shouldn’t cause alarm, indicating the rise in July was from supressed demand forced by lockdown as the industry began to slowly re-open.

He added: “The relatively small drop in fleet registrations of 5.5% in the face of a pandemic and difficult economic circumstances continues to show the resilience of the industry and should be a welcome relief to manufacturers.”

And Ashley Barnett, head of consultancy at Lex Autolease, highlighted that the new registration figures continue to paint an encouraging picture of the EV market.

“The ongoing effects of lockdown – including a shift towards more flexible working patterns, fewer commutes and a general reduction in business mileage – means more road users are now in situations where EVs are appropriate and practical. Although, we shouldn’t lose sight of the fact that EVs still only account for 0.27% of total cars on the UK’s roads.”

He added: “To make sure we keep up momentum, continued fiscal support and on-road perks are needed to increase the rate of adoption in line with the country’s Road to Zero targets. The upcoming introduction of green number plates to identify zero-emission vehicles is a welcome step to boost driver advocacy and we look forward to hearing the outcome of the Government’s consultation to bring forward the phase-out date of petrol and diesel vehicles to 2030 – another positive step towards cleaning up the UK’s roads.”

And while expectations mount for September, with anticipations of a bumper month as new 70 plates prompt an upturn, others in the auto finance sector have called for government and industry collaboration to help drive demand.

Seán Kemple, managing director at Close Brothers Motor Finance, said: “A few months of strong sales will bolster dealers’ bottom lines, but the threat of a second wave and broader economic downturn looms large. Now is the time for the industry to band together and work with the Government to create incentives for consumers who are considering their next big-ticket purchase. This goes beyond just the motor industry – the road ahead for the car market will have ramifications for public transport policy, the climate agenda, and British trade.”